Audits of Institutions of Higher Education
and Other Non-Profit Institutions

AGENCY: Office of Management and Budget

ACTION: Final Revision of OMB Circular A-133, "Audits of
Institutions of Higher Education and Other Non-Profit
Institutions"

SUMMARY: This revision of Office of Management and Budget (OMB)
Circular A-133 establishes a uniform system of auditing for
institutions of higher education and other non-profit
organizations. One of the more significant revisions is that the
threshold for when an entity is required to have an audit is
raised from $25,000 to $300,000. This will significantly reduce
audit costs for many small non-profit organizations. Other
significant changes are: additional guidance for program-specific
audits (§___.235), audit findings (§___.510), and audit findings
follow-up (§___.315); a report submission due date which is
shortened from 13 to 9 months and a report submission process
that includes a certification form and streamlined filing
requirements (§___.320); and, a new risk-based approach for major
program determination (§___.520).

DATES: The standards set forth in §___.400 of the Attachment to
this Circular, which apply directly to Federal agencies, shall be
effective July 1, 1996, and shall apply to audits of fiscal years
ending on or after June 30, 1997. The standards set forth in
this Circular that Federal agencies are to apply to non-profit
organizations shall be adopted by Federal agencies in codified
regulations not later than November 30, 1996, so that they will
apply to audits of fiscal years ending on or after June 30, 1997,
with the exception that §___.305(b) of the Attachment applies to
audits of fiscal years ending on or after June 30, 1999.

ADDRESSES: A copy of the Circular may be obtained from the OMB
fax information line, 202-395-9068, document number 1133; OMB
home page on the internet which is currently located at
/OMB; or by writing or calling
the Office of Administration, Publications Office, room 2200, New
Executive Office Building, Washington, DC 20503, telephone (202)
395-7332.

FOR FURTHER INFORMATION CONTACT: Recipients should contact their
cognizant or oversight agency for audit, or Federal awarding
agency, as may be appropriate in the circumstances.
Subrecipients should contact their pass-through entity. Federal
agencies should contact Sheila O. Conley, Office of Management
and Budget, Office of Federal Financial Management, Financial
Standards and Reporting Branch, telephone (202) 395-3993, fax
(202) 395-4915.

SUPPLEMENTARY INFORMATION

A. Background

The Office of Management and Budget (OMB) received
approximately 150 letters providing approximately 1600 individual
comments in response to the Federal Register proposal of March
17, 1995 (60 FR 14594-14606). Letters came from Federal agencies
(including Offices of Inspectors General), State governments
(including State auditors), certified public accountants (CPAs),
internal auditors, non-profit organizations (including colleges
and universities), professional organizations, and others. All
comments were considered in developing this final revision.

Section B presents a summary of the major public comments
grouped by subject and a response to each comment. Other changes
were made to increase clarity and readability.

B. Public Comments and Responses

Common Rule Format

Comment: Several commenters suggested that the implementation of
the Circular be done using the "common rule" format so that all
affected Federal agencies could codify the provisions of the
Circular without change and prior to the effective date.

Uniform Audit Requirements

Comment: In the preamble of the proposed revision, OMB stated a
plan to seek modifications to the Single Audit Act of 1984 (31
U.S.C. Chapter 75) and OMB Circular No. A-128, "Audits of State
and Local Governments," such that one law and one circular could
cover both State and local governments and non-profit
organizations. Commenters strongly supported this change.

Responses: Even though Circular A-133 does not apply to State
and local governments, provisions were made to easily adapt
Circular A-133 to include State and local governments if the
Single Audit Act is amended. For example, changes were made to
the risk-based approach to determine major programs for
circumstances that most likely will only occur in large State-wide
single audits.

Increased Threshold for Audit

Comment: Commenters overwhelmingly supported raising the
threshold for audit, with the majority supporting the proposed
threshold of $300,000. A common statement in favor of this
change was that it would reduce audit costs, while still
providing adequate audit coverage of Federal programs.

Response: This final revision raises the audit threshold to
$300,000. Pass-through entities should make appropriate changes
in their agreements with subrecipients to reflect that Circular
A-133 no longer requires an audit for entities expending less
than the $300,000 threshold. Also, pass-through entities will
need to consider this change, review their overall subrecipient
monitoring process, and decide what, if any, additional
monitoring procedures may be necessary to ensure subrecipient
compliance for the subrecipients not required to have a Circular
A-133 audit. It is expected these monitoring procedures could be
more targeted and less costly than the full Circular A-133 audit.

Special Provision for Certain Small Subrecipients

Comment: Most commenters opposed the provision to allow Federal
agencies to require pass-through entities to arrange for audits
of subrecipients receiving less than the $300,000. A reason
often cited was that this provision defeats the purpose of
raising the audit threshold.

Response: This provision was included in the proposed revision
to provide audit coverage of Federal programs, such as the Job
Training Partnership Act (JTPA) programs, which are structured
such that substantial service delivery and expenditure of Federal
funds are made by subrecipients that expend less than $300,000 in
Federal awards.

The provision has not been added to the Circular. However, it is
important to note that both the pass-through entity and the pass-through
entity's auditor have responsibilities for these funds
even when an audit of the subrecipient is not required. The
pass-through entity is still responsible to monitor the
activities of the subrecipient and ensure that Federal awards are
only used for authorized purposes. Additional monitoring
procedures may be necessary when a material amount of program
funds is passed through to subrecipients which are not audited.

The pass-through entity's auditor is responsible for performing
sufficient tests to support an opinion on compliance for each
major program. When subrecipients which are not audited expend a
material amount of funds from a major program, the auditor will
need to consider obtaining compliance assurances by reviewing the
pass-through entity's records and monitoring procedures,
performing additional procedures to determine compliance, such as
testing the subrecipient's records, or a combination of
procedures. In addition, the pass-through entity's auditor is
responsible for determining whether the pass-through entity's
system for monitoring subrecipients is adequate and whether
subrecipient noncompliance necessitates adjustment of the pass-through
entity's records.

Consideration of Triennial Audit

Comment: In the preamble of the proposed revision, OMB stated it
was considering a triennial audit approach and requested comments
on its feasibility. Commenters from non-profit organizations
supported a triennial audit approach. Reasons cited were relief
of audit burden and a reduction in the number of audits required
to be reviewed as part of subrecipient monitoring.

However, Federal agency commenters were opposed to a triennial
audit approach and cited problems, such as it would alert the
non-profit organization in advance of which years should be
audited, significantly complicate the risk-based approach for
selecting major programs (e.g., under the risk-based approach a
large program is only required to be audited once every three
years and with triennial audits this could be once in every nine
years), and result in only limited cost savings (e.g., under the
triennial audit approach a financial statement audit and testing
of internal control would still be required).

Response: The triennial audit approach was not added to the
Circular. However, the Circular does provide significant audit
relief to non-profit organizations by raising the audit threshold
from $25,000 to $300,000, allowing a risk-based approach to
selecting major programs, and streamlining the report
distribution process by use of a certification form. The risk-based
approach will permit low-risk non-profit organizations to
reduce the percentage of Federal expenditures required to be
covered as major programs. The certification form, as discussed
later in this supplementary information, will simplify the pass-through
entity's review of subrecipient reports which have no audit findings.

Risk-Based Approach to Determine Major Programs

Comment: Except for comments from CPAs, the commenters supported
the risk-based approach as presented. CPA commenters opposed the
risk-based approach and cited as reasons that it was
inappropriate for the auditor to determine major programs, there
could be problems in submitting a proposal to conduct a Circular
A-133 audit when it is not known in advance which programs will
be audited, and there would possibly be cost increases for the
auditor to perform risk assessments. While State auditor
commenters supported the risk-based approach, those from the
larger States cited implementation problems in performing risk
assessments on a large number of Type B programs.

Response: The auditor is best suited to determine major programs
for reasons, such as independence and the understanding of risk
to Federal programs obtained as part of the audit. Therefore,
the proposal has been adopted, with no changes made to the
requirement for the auditor to determine major programs.
However, in recognition of the concerns expressed relative to
larger audits, Appendix 1 (§___.520), Major Program
Determination, was modified as follows:

Step 1 (§___.520(b)(1)) was modified to provide a sliding
scale in determining Type A programs. This change only affects
auditees with Federal expenditures over $100 million.

Step 2 (§___.520(c)(2)) was modified to permit a Federal
agency, with OMB approval, to designate that a low-risk Type A
program could not be considered low-risk. This designation could
be for reasons, such as to help the Federal agency comply with
Section 405 of the Government Management Reform Act (P.L. 103-356).

Step 3 (§___.520(d)(2)) was modified to add a sliding scale
which defines relatively small Federal programs in terms of a
percentage of total Federal expenditures. This benefits very
large audits by reducing the number of Type B programs for which
the auditor must perform risk assessments. The decrease in the
total amount of Federal expenditures subject to audit will be
relatively small because of the wide difference in size between
the largest and smallest Federal programs.

Step 4 (§___.520(e)) was modified to only require one-half
of the high-risk Type B programs to be audited as major and
provide a limit that the number of these Type B programs audited
as major need not exceed the number of low-risk Type A programs.

However, should the auditor choose not to exclude a low-risk Type
A program, this would not affect the limit. The limit is on the
number of low-risk Type A programs, not the number excluded.
Also, even though larger dollar Type A programs may be excluded
as low-risk, they may still need to be audited to meet the 50
percent rule.

To mitigate any implementation problems with the risk-based
approach, the provision for deviation from use of risk criteria
provided in §___.520(i) applies to the first year this Circular
is applicable and permits auditors to defer implementation of the
risk-based approach for one year.

Implementation of the Risk-Based Approach
to Determining Major Programs

Comment: A commenter inquired whether a Type A program may be
considered low-risk when it was audited as a major program in
accordance with the prior Circular A-133, issued March 8, 1990,
and otherwise met the criteria in Appendix 1, step 2 to be
classified as low-risk.

Response: The reference in Appendix 1, step 2 (§___.520(c)(1))
to the two most recent audit periods means audit periods in which
the audit was performed either under the prior Circular A-133 or
this revision. Therefore, a Type A program which meets the
Appendix 1, step 2 (§___.520(c)(1)) criteria for low-risk based
on the results of an audit performed in accordance with the prior
Circular A-133 may be considered low-risk. Similarly, the
reference in the criteria for a low-risk auditee in Appendix 3
(§___.530) to the preceding two years applies to audits performed
either under the prior Circular A-133 or this revision.

Request for a Program to be Audited
as a Major Program

Comment: Several commenters expressed concern that the provision
for a Federal agency or pass-through entity to request a program
to be audited as a major program would significantly increase the
work required for single audits and requested that it be removed.
A few commenters also expressed concern that these programs would
not count towards meeting the 50 percent rule.

Response: This provision has been adopted; however, a change was
made to allow programs audited as major under this process to
count towards meeting the 50 percent rule. This process does not
significantly change the authority Federal agencies and pass-through
entities now have to perform additional audits as long as
they pay for them. The addition is that these audits may be
incorporated within the framework of the single audit and thereby
eliminate duplicative audit planning and reporting. Since the
Federal agency or pass-through entity must still pay the full
incremental audit cost, OMB does not expect a significant
increase in major programs from this provision.

It should be pointed out that any Type A program selected to be
audited under this provision must be low-risk. If it were not
low-risk, it would have been audited as a major program under the
risk-based approach. Therefore, this provision will not reduce
the number of high-risk Type B programs audited as major.

Required Level of Internal Control Testing

Comment: All CPA commenters and over half of the State auditor
commenters opposed the proposed requirement for the auditor to
plan the testing of internal control over Federal programs to
achieve a low assessed level of control risk. Concerns included
that it increases the amount of audit work, limits auditor's
judgment, and is arbitrary. By contrast, one commenter stated
support for the proposed requirement because it would force the
auditor to look at internal control over Federal programs and to
note reportable conditions when internal control is not adequate.

Response: The proposal has been adopted, with no changes. Some
commenters appeared to understand this provision to mean that,
when control exceptions are found, the auditor is required to
continue testing until a low level of risk is achieved. This is
not the case. The auditor is not required to expand testing to
try to achieve a low level of risk. The auditor is only required
to plan the audit for a low level of assessed risk and report the
results of this testing.

It has been a longstanding Federal policy that the recipient of
Federal funds is required to establish internal control systems
to provide reasonable assurance that it is managing Federal funds
in compliance with applicable laws and regulations. Also, the
Single Audit Act (31 U.S.C. Chapter 75) requires the auditor to
test internal control over Federal funds subject to that Act.
Therefore, it is reasonable to require the auditor to plan the
audit consistent with the level of internal control the recipient
of Federal funds is required to maintain. Also, the Circular
permits the auditor to not test internal controls which are
inadequate and instead disclose a reportable condition or
material weakness and perform additional tests of compliance as
necessary in the auditor's judgment.

Schedule of Expenditures of Federal Awards

Comment: Most commenters supported the level of detail included
in the proposal for the schedule of expenditures of Federal
awards. One commenter suggested that it would be beneficial for
pass-through entities to identify in the schedule the amount
passed-through to subrecipients. This disclosure would tell
program managers the amount of program expenditures that was
subject to audit at the pass-through entity level.

Response: A provision has been added to encourage, but not
require, pass-through entities to disclose in the schedule the
total amount provided to subrecipients from each Type A program
and from each Type B program which is audited as a major program.
In most cases this information should be readily available and
would improve the usefulness of the schedule.

Attestation on Internal Control and Compliance

Comment: The preamble to the proposed revision requested
comments as to whether a requirement should be added for the
audits to include a management assertion and auditor attestation
for internal control or compliance. The majority of commenters
were opposed to this change because it would impose additional
requirements on entity management and increase audit cost.

Response: In light of the concerns raised, this proposed
revision has not been added to the Circular.

Criteria for Reporting Questioned Costs

Comment: Commenters' views on the proposed $10,000 threshold for
reporting known or likely questioned costs varied from describing
it as too high, too low, or just right. Commenters expressed
concern that the concept of likely questioned costs needed
further clarification.

Response: OMB believes that the $10,000 threshold for reporting
questioned costs provides the appropriate balance between
reporting all questioned costs and only reporting large
questioned costs. Also, audit findings which do not result in
questioned costs but are material to the types of compliance
requirements or an audit objective in the compliance supplements
will still be reported as reportable conditions under
§___.510(a)(1) or material noncompliance under §___.510(a)(2).

Generally accepted auditing standards require the auditor to
project the amount of known questioned costs identified in the
sample to the items in the major program and to consider the best
estimate of total questioned costs (both known and likely) in
determining an opinion on compliance. The Circular does not
require the auditor to report an exact amount or statistical
projection of likely questioned costs, but rather to include an
audit finding when the auditor's extrapolation of these likely
questioned costs is greater than $10,000.

Since the requirement for the auditor to consider likely
questioned costs is not new, and since likely questioned costs
which are greater than $10,000 may be significant to a Federal
program, OMB believes they should be included in audit findings.
In reporting likely questioned costs, it is important that the
auditor follows the requirements of §___.510(b) and provides
appropriate information for judging the prevalence and
consequences of the audit finding.

Requirement to Follow up on Prior Audit Findings

Comment: One commenter expressed concern that the requirement
for the summary schedule of prior audit findings to include audit
findings from before the prior year may result in many old audit
findings being reported year after year.

Response: As a practical matter, unless an audit finding is
repeated in a subsequent year, there is limited value in
continuing to follow up on an audit finding when the Federal
agency or pass-through entity chooses to take no action.
Therefore, a provision has been added stating that a valid reason
for considering an audit finding as not warranting further action
is that: (a) two years have passed since the audit report was
filed with the central clearinghouse designated by OMB, (b) the
Federal agency or pass-through entity is not currently following
up on the audit finding, and (c) a management decision was not
issued.

Also, for the first year the entity is audited under this
Circular, the prior year report may not have included the
equivalent of a summary schedule of prior audit findings. In
these cases, the auditee may exercise judgment and only include,
to the extent practical, audit findings before the prior year.

Corrective Action Plan

Comment: Some college and university commenters expressed
concern that the requirement to list the name of the contact
person responsible for corrective action precluded a non-profit
organization from naming one person responsible for all audit
findings.

Response: The proposal has been adopted, with no changes. Some
commenters appeared to misunderstand this provision. It is
important that a non-profit organization name a contact person or
persons to be responsible for corrective action. However,
contrary to the commenters' understanding, the non-profit
organization has discretion to determine whether one person
should be responsible for all or a group of audit findings or
whether a separate person should be responsible for each audit
finding.

Pass-Through Entity's Responsibility
for Subrecipient Audit

Comment: A few commenters expressed concern that, unless the
pass-through entity gave the subrecipient $300,000, it would be
difficult to determine whether the subrecipient was required to
have an audit under the Circular. Specifically, the commenters
asked for guidance on how the pass-through entity could determine
if the subrecipient received other Federal awards which
cumulatively added up to the $300,000 threshold for audit.

Response: This provision has been adopted, with no changes.
There was no intention that this provision require the pass-through
entity to perform extensive verification procedures to
determine the total Federal expenditures of a subrecipient. OMB
expects that, in many cases, the pass-through entity will have
knowledge of the subrecipient sufficient to estimate the
subrecipient's total Federal expenditures. Another technique
would be for the pass-through entity to clearly explain the audit
requirements to the subrecipient and then ask the subrecipient
the amount of its total Federal expenditures.

Audit Cognizance

Comment: Some college and university commenters expressed
concern that the cognizant agency determination was not
consistent with the proposed revision to OMB Circular A-21, "Cost
Principles for Educational Institutions" (60 FR 7105; February 6,
1995), and could result in an entity having one cognizant agency
for audit purposes and another for indirect cost rate
negotiation.

Response: The responsibilities for audit cognizance and indirect
cost negotiation are different and, therefore, the same Federal
agency does not need to be cognizant for both. The name for the
cognizant agency has been changed to the cognizant agency for
audit to clearly distinguish it from the cognizant agency for
indirect cost rate negotiation.

Provision for Small and Minority Audit Firms

Comment: One commenter expressed concern that the provision for
small and minority audit firms was proposed for deletion.

Response: As explained in the preamble to the proposed revision,
this provision was proposed to be deleted because the
requirements related to small and minority audit firms are more
fully covered in §___.44(b)(4) of OMB Circular A-110, "Uniform
Requirements for Grants and Agreements with Institutions of
Higher Education, Hospitals and Other Non-Profit Organizations"
(58 FR 62992; November 29, 1993). There was no intention to
change or diminish the requirements for using small and minority
audit firms. To ensure that these requirements continue to
receive consideration, a provision has been added to the auditor
selection paragraph that, whenever possible in procuring audit
services, non-profit organizations shall make positive efforts to
utilize small businesses, minority-owned firms, and women's
business enterprises, as stated in OMB Circular A-110.

Restriction on Auditor also Preparing
Indirect Cost Proposal

Comment: The preamble to the proposed revision requested
comments on whether the auditor should also be permitted to
prepare the indirect cost proposal (including similar documents,
such as the cost allocation plan, or the disclosure statement
required by OMB Circular A-21). All Federal agency commenters
and most State auditor commenters cited at least an appearance of
lack of independence when the same auditor both performed the
audit and prepared the indirect cost proposal. One Federal
agency commenter stated, "In preparing the indirect cost
proposal, the auditor is an advocate for the client before the
Federal Government. We believe it stretches the bounds of
standards for the auditor to be considered independent to audit
this same indirect cost proposal for the purpose of providing
assurances to the Federal Government." In contrast, CPAs and
non-profit organizations did not see an independence problem and
stated there were significant efficiency advantages for the same
firm to both perform the audit and prepare the indirect cost
proposal.

Response: A provision (§___.305(b)) has been added to preclude
the same auditor from preparing the indirect cost proposal or
cost allocation plan when indirect costs exceeded $1 million in
the prior year. This threshold was chosen to limit this
restriction to a relatively small number of entities, while still
protecting the Federal interest. The prior year was chosen
because non-profit organizations often engage the auditor before
the end of the year and at this time it may be unknown whether
the current year's indirect costs will exceed the $1 million
threshold. Based on available data, OMB estimates that entities
with indirect costs exceeding $1 million cumulatively receive
approximately 90 percent of the total indirect costs charged by
non-profit organizations.

This restriction applies to the base year from which financial
data is used to compute the rates even though the audit of the
base year financial statements is often completed before the
indirect cost proposal or cost allocation plan is prepared. The
base year was included to enhance the appearance of independence
to the Federal agencies which rely upon the auditor's testing of
information used in both the calculation and application of
indirect cost rates.

The disclosure statements required by OMB Circular A-21 have been
excluded from this restriction because the disclosure statement
is new, many of the statements will be submitted before the
effective date of this Circular A-133 revision, and the
disclosure statements are expected to have a long life. Under
these circumstances, it does not seem appropriate public policy
to restrict auditors who prepared the original disclosure
statements from performing the audit for a long period of time.
Therefore, the disclosure statements required by OMB Circular
A-21 have been excluded from this restriction on auditor
selection. OMB will monitor these disclosure statements and may
revisit this issue again at a later date.

The implementation date for this provision is delayed two years
until audits of fiscal years ending on or after June 30, 1999, to
minimize any effect this provision could have on existing
contracts for audit services. For example, an auditor that
prepared an indirect cost proposal or cost allocation which is
used as the basis for charging indirect costs in the fiscal year
ending June 30, 1999, is not permitted to perform the 1999 audit.

Report Due Date

Comment: Most State auditor and college and university
commenters expressed opposition to shortening the due date for
reports from 13 to 9 months. However, most State manager and
non-profit organization commenters supported the change. The
view appeared to be that those receiving and relying on the
reports and those currently completing the audit in 9 months
liked the change. By contrast, it appears that those who were
not currently completing the audit in 9 months opposed the
change.

Response: This proposal has been adopted, with a change. The
provision retains the requirement in the Circular that, when the
audit is completed earlier than the due date, the reporting
package must be submitted within 30 days of audit report
issuance.

Certification

Comment: Comments were mixed on the certification form. Most
State auditor and CPA commenters opposed the certification form,
citing it as an increased burden on them to prepare and
duplicative of information in the audit reports. Most college
and university commenters supported the use of the certification
form as a method of reducing the volume of paper in single
audits.

On a related issue, some State auditor and CPA commenters cited a
possible logistical problem that the auditor would not be able to
complete the audit report until the certification form was
prepared (because the auditor must read the certification form
and report as an audit finding material inconsistencies with the
audit) and the certification form could not be prepared until the
audit is completed.

Response: The requirements for the auditor to read the
certification form and report as an audit finding any material
inconsistencies has not been adopted. As a preventive control to
ensure proper distribution of audit reports, a requirement
(§___.500(f)) has been added for the auditor to identify to the
auditee those Federal awarding agencies and pass-through entities
which are required to receive a copy of the reporting package.
Also, a requirement (§___.505(b)) was added for the schedule of
findings and questioned costs prepared by the auditor to include
a summary of the auditor's results. This summary will facilitate
preparation of the certification form by the auditee.

Management Letter

Comment: Most commenters expressed concern that routinely
including management letters as part of a public filing of the
auditor's reports could reduce the effectiveness of management
letters.

Response: OMB agrees that it is not necessary to routinely
include auditor's management letters as part of the report
submission. Therefore, this provision has not been adopted.
However, because management letters may contain information
relevant to the needs of Federal agencies and pass-through
entities to monitor Federal awards, a provision has been added
that Federal agencies and pass-through entities can request a
copy of management letters.

Coordinated Audit Approach

Comment: A few commenters expressed concern that the term
coordinated audit approach was not used in the proposed revision
and whether the removal of this term precluded Federal auditors
from participating in audits required by this Circular.

Response: The proposed revision does not prohibit the
participation of Federal auditors in audits required by the
Circular, a concept referred to as the coordinated audit
approach. This term was not included in the proposed revision
because the definition of auditor clearly includes Federal audit
organizations and further reference to the term coordinated audit
approach was not considered necessary. A provision (§___.305(c))
has been added to clarify that Federal auditors may perform all
or part of the work required under the Circular if they fully
comply with the requirements of the Circular.

GOCOs and FFRDCs

Comment: A few Federal agency and non-profit organization
commenters expressed concern that the proposed revision did not
specifically address Federal Government owned, contractor-operated
facilities (GOCOs) or Federally Funded Research and
Development Centers (FFRDCs).

Response: A provision has been added to the definition of the
term Federal award that contracts to operate GOCOs are excluded
from the requirements of this Circular. Also, paragraph
§___.200(e) has been added to allow management of an auditee that
owns or operates a FFRDC to elect to treat the FFRDC as a
separate entity for purposes of this Circular. If the FFRDC is
treated as a separate entity, the determination of cognizant
agency for audit would be based upon this separate entity.

Questions and Answers on OMB Circular A-133

Comment: In May 1992, the Standards Subcommittee of the
President's Council on Integrity and Efficiency (PCIE) issued
PCIE Position Statement No. 6, titled "Questions and Answers on
OMB Circular A-133" (A-133 Q&A). A commenter inquired whether
this document could be used as guidance in performing audits
under the revised Circular A-133.

Response: Since this revision makes significant changes in OMB
Circular A-133, the May 1992 A-133 Q&A should not be used as a
primary source of guidance for audits performed under this
revision. However, many items in the A-133 Q&A were incorporated
in this revision and the A-133 Q&A may be a useful historical
reference of the single audit process. If there are significant
questions concerning the revised Circular A-133, OMB will
consider issuing a revised A-133 Q&A.

Compliance Supplements

Comment: Some CPA and State auditor commenters expressed concern
that Federal agencies should keep the compliance supplements
current.

Response: OMB recognizes the need for updated compliance
supplements and is working with Federal agencies and the PCIE to
complete this task. OMB's current plans are to issue a revised
compliance supplement by the end of 1996.

Public Information Collection

The revision includes an information collection requirement for
reports from auditors concerning their audit findings to auditees
(§___.235(b)(4), §___.505, and §___.510) and reports from
auditees to the Federal Government concerning these report
(§___.235(c) and §___.320). OMB requested comments on the
proposed information collection described in the Circular in a
April 1, 1996 Federal Register notice (61 FR 14338) in accordance
with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35 et
seq). The proposed information collection requirement will not
be effective until another notice is published in the Federal
Register. The subsequent notice will provide the effective date
and the OMB control number.